The high-quality hard coal mined in the Kemerovo region is mainly supplied to energy companies in Europe and Asia and it is produced from nine underground mines and two open pits. The coal from most of our mines and open pits in this region has a calorific value of 5,800-6,100 kcal/kg. The premium-quality coal mined at the Kirova and Komsomolets mines can be sold as semi-soft coking coal to the iron and steel industries.

Coal with a calorific value of 5,000-5,700 kcal/kg is mainly sold to Russian power generation companies, including Siberian Generating Company (SGK).

Mines

Kirova underground mine

November 7 underground mine

Polysaevskaya underground mine

Komsomolets underground mine

Rubana underground mine

Yalevskogo underground mine

Kotinskaya underground mine

Taldinskaya-Zapadnaya 1 underground mine

Taldinskaya-Zapadnaya 2 underground mine

Zarechny open pit

Kamyshansky open pit

Washing Plants

Kirova mine WP No.1 and No.2

Komsomolets mine WP

Polysaevskaya mine WP

Taldinskaya-Zapadnaya 1 mine WP

Khakasia

Our units in Khakasia produce premium hard steaming coal with a high calorific value. Half of the coal produced is exported to Europe and Asia.

SUEK Group’s production units in Khakasia are located in the Minusinsk basin. Hard steaming coal is mined from three open pits and one underground mine. As an integral part of our strategy, the Group aims to increase sales of washed, sized coal with a calorific value of 5,500-5,600 kcal/kg from Khakasia to the Atlantic region. This type of coal is sold at a premium to un-sized steam coal.

Our largest Russian customers are power plants, including SGK and coal distribution companies, which supply households and public utilities.

Mines

Chernogorsky open pit

Vostochno-Beisky open pit

Izykhsky open pit

Khakasskaya underground mine

Washing Plant

Chernogorsky WP

Krasnoyarsk

The brown coal produced from our Krasnoyarsk open pits is supplied solely to Russian markets.

Our production units in Krasnoyarsk are situated in the Kansk-Achinsk basin, where we mine from three open pits. The coal is supplied principally to power stations and public utilities within the region. These mining operations are relatively simple and low cost due to limited overburden thickness, which results in the lowest stripping ratio among the Group’s production units. The combination of seams up to 58 metres thick, soft overburden and flat gradients, allows us to use bucket-wheel excavators which load directly onto railway wagons or conveyor belts.

Mines

Borodinsky open pit

Berezovsky open pit

Nazarovsky open pit

Buryatia

In Buryatia we extract high-quality hard coal from Tugnuisky open pit. Virtually all the coal produced here is exported to Asia.

The Tugnuisky open pit in Buryatia uses modern equipment and employs sophisticated planning, operational and management systems.

Recently the company also acquired a coal mining license for the Nikolsky hard coal deposit located nearby Tugnuisky open pit and washing plant. The Nikolsky deposit contains 270 Mt of mineable reserves. Nikolsky coal is higher quality and will facilitate the production of washed products with higher calorific value, thereby increasing the prospect of sales in premium markets. In 2016, the company produced the first million tonnes of coal from the Nikolsky open pit. The target for 2017 is 2 Mt a year.

The truck method is used for mining, with hydraulic excavators and draglines employed for the removal of overburden. Most of the coal is exported, mainly to China, Japan and South Korea.

Tugnuisky and Nikolsky produce low-nitrogen hard coal, which meets the requirements of Japanese power utilities and the Group aims to increase sales to Japan in the future. Approximately 9% of coal exported from Buryatia is delivered directly to China by rail across the Russian-Chinese border; the remaining coal is sold to Russian power plants and utilities.

Mines

Tugnuisky open pit

Nikolsky open pit

Washing Plant

Tugnuisky WP

Zabaikalye

Historically, Zabaikalye pits produced only brown coal, but in 2012 we started to develop the Apsatsky coking coal deposit.

In 2012, the Group commenced production at Apsatsky coalfield, 40 km from the Baikal-Amur Mainline (BAM) railway. The open pit extracts valuable, mid-volatile coking coal which is in high demand both in Asian coking coal markets and in Russian metallurgical markets.

In Zabaikalye the Group also mines brown coal at the other two open pits in the area — Kharanorsky and Vostochny — predominantly for supply to nearby power stations.

Mines

Kharanorsky open pit

Vostochny open pit

Apsatsky open pit

Khabarovsk

Coal produced in Khabarovsk is known as ‘Urgal’ coal, and is primarily supplied to the Asia-Pacific region.

The Group’s mining operations in Khabarovsk are located at the Urgal deposit in the Bureinsky basin. The Bureinsky open pit and the Severnaya underground mine both produce hard coal. SUEK Group supplies coal from Khabarovsk mines primarily to China and South Korea. The proximity of the Urgal mine to our Vanino Bulk Terminal represents a significant competitive advantage in terms of ease of transportation. Mines in this region also supply coal to Russian power generation customers located in the Khabarovsk and Primorye regions.

Mines

Severnaya underground mine

Bureinsky open pit

Washing Plant and Processing Facility

Chegdomyn WP

Processing facility at Bureinsky open pit

Primorye

Our Primorye mines are located close to Russia’s eastern border, which generates major savings on transportation costs.

The close positioning of these mines to far-eastern ports in Russia means SUEK Group has a significant competitive advantage when supplying the Asia-Pacific markets with coal from this region. From the Vostochnoe underground mine the Group supplies hard coal primarily to international markets — mainly to China by rail. The remaining coal is supplied to Russian customers.

The Pavlopsky open pit is located in the Pavlovsky coalfield which supplies brown coal principally for Russian power generation. All sales from this production unit in 2014 were to the Russian market.

Mines

Pavlovsky open pit

Vostochnoe underground mine

Processing Facility

Dry coal separator at Vostochnoe mine

Rail transport

Rail transport

The Group operates one of the largest rail fleets in Russia. Railway transport is crucial to the coal production and distribution chain.

SUEK’s coal accounts for 7.7% of total cargo turnover on Russian rail, which is operated by the state-controlled Russian Railways (RZhD). Our 746-km rail system provides connections between the national rail network and our mines and port facilities. In 2015, the average distance for delivery of coal for international supplies on the combined rail networks was 4,323 km and for deliveries to Russian customers it was 612 km.

SUEK Group also runs 190 trains and has 26 dedicated loading stations.

Port facilities

Vanino Bulk Terminal

The modern Vanino Bulk Terminal is our key export gateway from Russia to the Asia-Pacific markets.

Located on Russia’s far east coast, our Vanino Bulk Terminal has direct access to two independent main railway lines — Trans-Siberian and Baikal-Amur Mainline (BAM) — which connect Vanino to the whole of Russia.

The port was built in 2008 specifically for the shipment of our coal, providing the shortest route to end users in countries including China, South Korea, Japan and Taiwan. The terminal represents an investment of $435m and features an automated rail wagon unloading system, a coal storage with a capacity for up to 1.2 million tonnes and equipped with stacker-reclaimers, and state-of-the-art dust suppression systems. The port is capable of receiving and handling ‘capesize’ vessels.

Maly Port and Murmansk Commercial Seaport

SUEK Group is one of the major shareholders at Maly Port and at Murmansk Commercial Seaport

The Group has a 49.9% shareholding in Maly Port and holds 75.5% of voting shares at Murmansk Commercial Seaport.

Maly Port is located in the Primorye region in far-eastern Russia and in 2016 the Group shipped 2.8 million tonnes through this port to Asia-Pacific customers, mainly in Japan, South Korea, China, Taiwan and Vietnam.

Murmansk Commercial Seaport provides access to the Atlantic Ocean and links to ports in Western Europe, the Mediterranean and on the eastern seaboard of the US. In 2016, the Group shipped 14.2 million tonnes of coal through Murmansk to European countries, including the UK, Germany and the Netherlands.

Sales network

Sales network

SUEK Group’s expanding sales network ensures close cooperation and long-term relationships with consumers in the Russian, Atlantic and Pacific markets.

In Russia, the Group sells coal to large industrial companies and energy providers as well as to smaller customers. The commercial department of JSC SUEK manages the sales function of our production units, servicing customers directly within Russia.

International coal sales are managed by SUEK AG, headquartered in Switzerland, which has a network of offices and subsidiaries in countries of strategic importance to the Group.

SUEK AG determines market strategy in terms of international coal sales, searches for coal buyers and builds long-term partnerships with them. It studies overseas markets, including information about coal producers, competitors, customers and logistics. The company also attracts credit resources in the European markets to help fund its trading activities, as, being a Swiss resident, it has permanent access to the capital markets.